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    Cooper, AGL to sign new gas deal

Summary

The Australian companies have also agreed to amend the existing Sole gas sales agreement.

by: Shardul Sharma

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Cooper, AGL to sign new gas deal

Sydney-listed explorer Cooper Energy and Australian utility AGL Energy have agreed to sign a new gas sales agreement (GSA) for all developed and uncontracted volumes from the Casino, Henry and Netherby fields in the Otway basin in southern Australia, Cooper said on September 13.

The companies have also agreed to amend the existing Sole GSA. These new arrangements will take effect from January 1, 2022.

The new Otway basin GSA is for the supply of all developed and uncontracted volumes from the existing Casino, Henry and Netherby wells. The term is the earlier of cessation of production from the existing wells or first production from the Otway Phase 3 Development (OP3D). Pricing for the new GSA is consistent with the Australian Competition and Consumer Commission’s July 2021 Gas Inquiry Interim Report range of A$6-8 ($4.4-5.9)/gigajoules for contracted gas supply, Cooper said.

The Sole GSA has been amended so the annual contract quantity (ACQ) is reduced from 12 PJ/year to 6 PJ/year and the term extended by two years to December 31, 2030. The amendments include a mechanism to increase the ACQ by up to 6 petajoules/year from future Sole production increases, with the total incremental volume for AGL capped at 30 petajoules.

GSA pricing and other terms remain unchanged. Sole production above the previous total contracted volume of 22 petajoules in the calendar year 2022, or incremental volume not purchased by AGL, will be available to sell into new contracts, the company said.

Cooper said that there is a reduced requirement for third-party gas purchases in FY22 due to the new gas sale arrangements with AGL. Accordingly, the FY22 full-year sales volume guidance range has been narrowed to 3.7 – 4.1mn boe from 3.7 – 4.3mn boe. All other guidance is unchanged.